100 Second Avenue South, Suite 600, St. Petersburg, Florida 33701 | (727) 821-6161 | www.gsscpa.com

You have probably seen them – barcodes that look like strangely deformed checkerboards. But you may not be sure of the business purpose or opportunity.

These two-dimensional barcodes store a lot of information that can be read automatically by smartphones. A Quick Response code – usually called a QR code – is a 2-D barcode that is readable by dedicated QR readers, smartphones and, to a lesser extent, computers with webcams.

The code contains encoded information that can display text, look up a document on a website, send an email or add a vCard of contact information to the user’s smartphone. QR codes were originally created and used by Toyota to track parts used in vehicle manufacturing in 1994.

A number of international standards beginning in the late 1990s support this format and define its content, use and compat-ibility. The use of QR codes has expanded for both commercial tracking and consumer convenience, allowing mobile phones to read information with their built-in cameras and look up infor-mation contained in the code.

Businesses and individual users can create QR codes by visiting free or paid sites that generate the codes. QR codes can then be used on business cards, literature or posters as a source of additional information. You can even create barcodes that you print and put on the front door of your office.

You can probably think of more than one use for a QR code in your business, and it is wise to begin using QR codes as soon as you can. QR codes are not a fad, although the technology could be replaced by some more advanced technology in coming years.

Two examples of QR codes are shown below.

A couple of tools for creating these barcodes include Zint, an open source barcode generator available from SourceForge.net, and QRStuff, a website that has tools to generate QR codes. Users with a camera phone equipped with the correct reader application can scan the image of the QR code to display text and contact information, connect to a wireless network, or open a Web page in the telephone’s browser. This act of linking from physical world objects is ca l led hardlinking or object hyperlinking.

There are more than 50 paid and free QR code apps. Examples of QR code applications include:

➤Google Goggles ➤ Third-party barcode scanners

like ZXing or Kaywa.➤ Bing search app in the Mango

update.➤ Barcode Scanner

I n s i d e

I n s i d e

Fall 2011➜ Profile of a fraudster:

Is one lurking in your company?

➜ Manage conflict to prevent slowdown in productivity

See QR Codes on back

➤ ScanLife➤ QR Name Card ➤ and many more.How could a barcode help your business? One of the

first issues in adopting a new technology is to determine an online solution to an existing business need.

The next step is to create a solution that is easy enough for the average person to use. At this point, only the geeks are using the technology – and then, many times, only because they think the technology is cool. So the trick is to make the technology actually cool and useful in the minds of real people who take kids to school and have full-time jobs.

QR codes solve a significant business need – in this case, getting data keyed into a device such as a smartphone and looking up needed information, such as specification sheets or product information needed for sales. Salespeople are now commonly using QR codes on their business cards, websites, product literature, shipping labels or the product itself to contain much more information than a standard barcode can.

For example, if you wanted a complete bill of lading or certification of a food product in a shipment, a QR code could link back to your document management system to give access to that single document.

What are the steps to using QR codes?Consider the content and locations you’d like to

publish.Select a tool that can create the codes.Build the supporting information for the QR code

request.Include the generated code in your business literature

or information.Use a tracking mechanism to understand which QR

codes are the most effective.Design a follow-up process for opportunities that are

generated.If you have not been using QR codes, consider adopting

the technology. This may be one of the least expensive marketing and tracking tools you have ever found. – Randolph Johnston, CPAmerica’s technology consultant

QR Codes continued from front

QR CodesCost-effective marketing tool

A financial and management bulletin to manufacturers from:

The technical information in this newsletter is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. Please be advised that, based on current IRS rules and standards, the information contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS. © 2011 CPAmerica International

Inventory Counts

SUITE 1700 ASB TOWER1001 BISHOP ST.

HONOLULU, HAWAII 96813

What should a manager do when two or more employees are squabbling with each other?

Chronic conflict can hurt productivity, cause customers to leave and induce talented employees to look for a more agreeable place to work.

But if managers jump in too quickly, they run the risk that employees will never learn to work through their differences on their own. Instead, they may be all too willing to argue over differences of opinion, knowing that the boss will fix it.

At the other extreme, some managers hate dealing with conflict so much that they stick their heads in the sand and neglect to do anything about it. They may rationalize that “I don’t have time to deal with such petty issues” or “Jennifer is one of my top performers. I don’t want her to quit.” They hope the issues will work themselves out sooner or later.

But avoidance seldom solves entrenched conflicts, which are only likely to get worse if ignored.

A rule of thumb is to encourage the warring parties to work it out on their own. But if the conflict starts affecting their work – or other people’s work – and persists for more than a couple of days, the manager should talk to the employees involved and be prepared to take an active role in solving the problem.

Following are some guidelines for how to intervene when it gets to that point.

Separate employees for a cooling off period.If emotions are too high for constructive discussion, schedule

a later time for the three of you to meet. The next day is often best as there is some merit to “sleeping on it.” Separate the employees until then if necessary.

Allow both to tell their stories.At the appointed first meeting, give each employee a

chance to tell his or her story. Ask the other not to interrupt. Ask questions to get all the facts. Recognize that there are two sides to every story, and both may be accurate as far as they go. Listen without judging or taking sides.

Keep the discussion about specific, observable, job-relevant behaviors.

As they tell their stories, you can begin to model construc-tive conf lict resolution by bringing the dialogue back to objective behaviors whenever they veer off into opinions or characterizations of the other’s personality or motives. One way to do that is to respectfully repeat, as necessary, “Tell me what you saw and heard. How did it affect your ability to do your job?”

Paraphrase their positions, and validate both parties.When both employees have finished presenting their

views, paraphrase what they said, substituting more objective language where appropriate. Validate both of them by expressing empathy and understanding of their positions. Continue moving toward constructive resolution by giving positive feedback for any elements of compromise or problem-solving in their presentations.

Bring a reality check to the discussion – reframe the problem so it is solvable.

This is the point where you introduce a new perspective. Often parties in a conflict become so embroiled in the minutiae of what happened, fueled by their emotional reactions, that they can’t see the beach for the sand. It is your job to reframe the situation in a way that is solvable. Show them the bigger picture. Appeal to their better nature, which sets the stage for the next step.

Engage employees to come together and create a solution – hold each accountable.

Ask the pair what it would take to resolve the conflict and what each of them is willing to contribute. Be clear that you expect each of them to take an active role in finding a solution. In other words, show that you are not going to decide who is right and who is wrong, but rather that you are interested in what they are going to do differently in the future.

Plan for follow-up.Once the employees have agreed on a solution, schedule a

follow-up meeting. This brings home to them that they will be held accountable for actually doing what they agreed to do. And, of course, it provides an opportunity for you to assess their progress and make adjustments if necessary.

With conscientious and engaged employees, these kinds of interventions on your part should be sufficient to get past the conflict and restore equilibrium. If not, you may need to look at your performance management policies and procedures. – Jeff Van Pelt, Ed.D., SPHR

The old saying goes, “You can’t judge a book by its cover.” But in the world of fraud, this may not be the case.

In the Association of Certified Fraud Examiners’ 2010 Report to the Nations on Occupational Fraud & Abuse, 1,843 cases of occupational fraud were studied that had been reported by certified fraud examiners who investigated the cases.

Although the report provides a tremendous amount of information on the attributes and statistics of fraud and of those who commit fraud, it also provides a hidden profile of a perpetrator if you look deeply at the data and between the lines.

Although an employee may possess one or more of the following traits or characteristics, that is not the only reason to suspect them of committing fraud. All other considerations must be taken into account, along with the evidence implicating the employee.

The report revealed these common traits or characteristics of average fraudsters:

They are likely to be male, age 31-45. Males are 33 percent more likely to commit fraud than their female colleagues. This can be broken down even further in level of authority in the organization. At the employee level, the amount of fraud committed is pretty much 50/50 between males and females. However, as you move up the level of authority in an organi-zation, men start pulling away.

At the manager/senior executive level, men are approximately 25 percent more likely to commit fraud and approximately 40 percent more likely than females at the owner/top-end executive level. Although it may sound chauvinistic, the report data indi-cated that these higher level positions were dominated by males.

The median loss associated with males – $232,000 – was more than double the median loss associated with females at $100,000.

In two-thirds of the fraud schemes, the perpetrator acted alone.

A majority – 55 percent – attended college or graduated from college. Approximately 14 percent obtained a postgraduate degree. The median loss increases from $100,000 for employees with a high school diploma to $300,000 for employees who obtained a postgraduate degree.

More than half of the employees who committed fraud had more than five years’ experience with their organizations. The median loss increases as the number of years with an employer increases. The median loss for employees with less than one year of tenure was $47,000 and rose to $289,000 for employees with 10 or more years of tenure.

The typical fraudster is an employee living beyond his or her means, struggling financially or known to have an addictive personality. Fraud perpetrators were living beyond their means in 43 percent of the cases and experiencing financial difficulties in 36 percent.

An employee who commits fraud usually works in the following departments: accounting, operations, sales, customer service, upper management or purchasing. Those six depart-ments accounted for 80 percent of the cases examined in the report. Most, 22 percent, were employed in the accounting department where they have easier access to records and documents to conceal or perpetrate a fraud.

Many are “wheeler-dealers” or can be seen as “control freaks.” They typically will have a high confidence level, bordering on the narcissistic.

An overwhelming number of the employees who commit fraud – 93 percent – have no prior criminal record or history of a fraud-related offense. This is because many employers are too embarrassed to prosecute employees or don’t want the publicity of the arrest of an employee who handled money or had access to someone’s personal information.

Secrecy is especially true in the nonprofit sector, in which organizations are dependent on pledges or contributions from the public. Think of the impact on contributions if the public discovered that a portion of their contribution was stolen. Many employers believe that the personal and business costs of prosecution are not worth the benefits received or money recovered. In many incidences, the employer recovers only a small portion of the amounts stolen.

Look for the following characteristics or problems in employees:Divorce or family problemsDrug or gambling addictionsLegal problemsDefensivenessIrritability and suspiciousnessRefusal to take vacations or sick daysConstant complaining about inadequate payUnusually close relationship with a vendor or customerConstant complaining about supervisors or being passed

over for promotionsEmployees who commit fraud usually work for small

companies with limited resources to hire an accounting department. So owners put all their trust in one employee. Under the right social pressures or circumstances, those employees have taken advantage of the trust instilled in them.

The presence of these characteristics does not, in and of itself, signify that an employee is committing fraud or will in the future. These are just the common traits and characteristics of the average fraudster identified in the Association of Certified Fraud Examiners annual report. – John Dubiel, CPA/CFF, CFE, CVA

Manage conflict

to prevent slowdown in productivity

Profile of a fraudsterIs one lurking in your company?

Continue moving toward constructive resolution by giving positive feedback for any elements of compromise or problem-solving in their presentations.

Fall 2011 Inventory Counts2 Fall 2011 Inventory Counts 3

What should a manager do when two or more employees are squabbling with each other?

Chronic conflict can hurt productivity, cause customers to leave and induce talented employees to look for a more agreeable place to work.

But if managers jump in too quickly, they run the risk that employees will never learn to work through their differences on their own. Instead, they may be all too willing to argue over differences of opinion, knowing that the boss will fix it.

At the other extreme, some managers hate dealing with conflict so much that they stick their heads in the sand and neglect to do anything about it. They may rationalize that “I don’t have time to deal with such petty issues” or “Jennifer is one of my top performers. I don’t want her to quit.” They hope the issues will work themselves out sooner or later.

But avoidance seldom solves entrenched conflicts, which are only likely to get worse if ignored.

A rule of thumb is to encourage the warring parties to work it out on their own. But if the conflict starts affecting their work – or other people’s work – and persists for more than a couple of days, the manager should talk to the employees involved and be prepared to take an active role in solving the problem.

Following are some guidelines for how to intervene when it gets to that point.

Separate employees for a cooling off period.If emotions are too high for constructive discussion, schedule

a later time for the three of you to meet. The next day is often best as there is some merit to “sleeping on it.” Separate the employees until then if necessary.

Allow both to tell their stories.At the appointed first meeting, give each employee a

chance to tell his or her story. Ask the other not to interrupt. Ask questions to get all the facts. Recognize that there are two sides to every story, and both may be accurate as far as they go. Listen without judging or taking sides.

Keep the discussion about specific, observable, job-relevant behaviors.

As they tell their stories, you can begin to model construc-tive conf lict resolution by bringing the dialogue back to objective behaviors whenever they veer off into opinions or characterizations of the other’s personality or motives. One way to do that is to respectfully repeat, as necessary, “Tell me what you saw and heard. How did it affect your ability to do your job?”

Paraphrase their positions, and validate both parties.When both employees have finished presenting their

views, paraphrase what they said, substituting more objective language where appropriate. Validate both of them by expressing empathy and understanding of their positions. Continue moving toward constructive resolution by giving positive feedback for any elements of compromise or problem-solving in their presentations.

Bring a reality check to the discussion – reframe the problem so it is solvable.

This is the point where you introduce a new perspective. Often parties in a conflict become so embroiled in the minutiae of what happened, fueled by their emotional reactions, that they can’t see the beach for the sand. It is your job to reframe the situation in a way that is solvable. Show them the bigger picture. Appeal to their better nature, which sets the stage for the next step.

Engage employees to come together and create a solution – hold each accountable.

Ask the pair what it would take to resolve the conflict and what each of them is willing to contribute. Be clear that you expect each of them to take an active role in finding a solution. In other words, show that you are not going to decide who is right and who is wrong, but rather that you are interested in what they are going to do differently in the future.

Plan for follow-up.Once the employees have agreed on a solution, schedule a

follow-up meeting. This brings home to them that they will be held accountable for actually doing what they agreed to do. And, of course, it provides an opportunity for you to assess their progress and make adjustments if necessary.

With conscientious and engaged employees, these kinds of interventions on your part should be sufficient to get past the conflict and restore equilibrium. If not, you may need to look at your performance management policies and procedures. – Jeff Van Pelt, Ed.D., SPHR

The old saying goes, “You can’t judge a book by its cover.” But in the world of fraud, this may not be the case.

In the Association of Certified Fraud Examiners’ 2010 Report to the Nations on Occupational Fraud & Abuse, 1,843 cases of occupational fraud were studied that had been reported by certified fraud examiners who investigated the cases.

Although the report provides a tremendous amount of information on the attributes and statistics of fraud and of those who commit fraud, it also provides a hidden profile of a perpetrator if you look deeply at the data and between the lines.

Although an employee may possess one or more of the following traits or characteristics, that is not the only reason to suspect them of committing fraud. All other considerations must be taken into account, along with the evidence implicating the employee.

The report revealed these common traits or characteristics of average fraudsters:

They are likely to be male, age 31-45. Males are 33 percent more likely to commit fraud than their female colleagues. This can be broken down even further in level of authority in the organization. At the employee level, the amount of fraud committed is pretty much 50/50 between males and females. However, as you move up the level of authority in an organi-zation, men start pulling away.

At the manager/senior executive level, men are approximately 25 percent more likely to commit fraud and approximately 40 percent more likely than females at the owner/top-end executive level. Although it may sound chauvinistic, the report data indi-cated that these higher level positions were dominated by males.

The median loss associated with males – $232,000 – was more than double the median loss associated with females at $100,000.

In two-thirds of the fraud schemes, the perpetrator acted alone.

A majority – 55 percent – attended college or graduated from college. Approximately 14 percent obtained a postgraduate degree. The median loss increases from $100,000 for employees with a high school diploma to $300,000 for employees who obtained a postgraduate degree.

More than half of the employees who committed fraud had more than five years’ experience with their organizations. The median loss increases as the number of years with an employer increases. The median loss for employees with less than one year of tenure was $47,000 and rose to $289,000 for employees with 10 or more years of tenure.

The typical fraudster is an employee living beyond his or her means, struggling financially or known to have an addictive personality. Fraud perpetrators were living beyond their means in 43 percent of the cases and experiencing financial difficulties in 36 percent.

An employee who commits fraud usually works in the following departments: accounting, operations, sales, customer service, upper management or purchasing. Those six depart-ments accounted for 80 percent of the cases examined in the report. Most, 22 percent, were employed in the accounting department where they have easier access to records and documents to conceal or perpetrate a fraud.

Many are “wheeler-dealers” or can be seen as “control freaks.” They typically will have a high confidence level, bordering on the narcissistic.

An overwhelming number of the employees who commit fraud – 93 percent – have no prior criminal record or history of a fraud-related offense. This is because many employers are too embarrassed to prosecute employees or don’t want the publicity of the arrest of an employee who handled money or had access to someone’s personal information.

Secrecy is especially true in the nonprofit sector, in which organizations are dependent on pledges or contributions from the public. Think of the impact on contributions if the public discovered that a portion of their contribution was stolen. Many employers believe that the personal and business costs of prosecution are not worth the benefits received or money recovered. In many incidences, the employer recovers only a small portion of the amounts stolen.

Look for the following characteristics or problems in employees:Divorce or family problemsDrug or gambling addictionsLegal problemsDefensivenessIrritability and suspiciousnessRefusal to take vacations or sick daysConstant complaining about inadequate payUnusually close relationship with a vendor or customerConstant complaining about supervisors or being passed

over for promotionsEmployees who commit fraud usually work for small

companies with limited resources to hire an accounting department. So owners put all their trust in one employee. Under the right social pressures or circumstances, those employees have taken advantage of the trust instilled in them.

The presence of these characteristics does not, in and of itself, signify that an employee is committing fraud or will in the future. These are just the common traits and characteristics of the average fraudster identified in the Association of Certified Fraud Examiners annual report. – John Dubiel, CPA/CFF, CFE, CVA

Manage conflict

to prevent slowdown in productivity

Profile of a fraudsterIs one lurking in your company?

Continue moving toward constructive resolution by giving positive feedback for any elements of compromise or problem-solving in their presentations.

Fall 2011 Inventory Counts2 Fall 2011 Inventory Counts 3

100 Second Avenue South, Suite 600, St. Petersburg, Florida 33701 www.gsscpa.com | gss@gsscpa.com

(727) 821-6161If we may answer any of your questions on the information contained in this

publication, please contact us.

You have probably seen them – barcodes that look like strangely deformed checkerboards. But you may not be sure of the business purpose or opportunity.

These two-dimensional barcodes store a lot of information that can be read automatically by smartphones. A Quick Response code – usually called a QR code – is a 2-D barcode that is readable by dedicated QR readers, smartphones and, to a lesser extent, computers with webcams.

The code contains encoded information that can display text, look up a document on a website, send an email or add a vCard of contact information to the user’s smartphone. QR codes were originally created and used by Toyota to track parts used in vehicle manufacturing in 1994.

A number of international standards beginning in the late 1990s support this format and define its content, use and compat-ibility. The use of QR codes has expanded for both commercial tracking and consumer convenience, allowing mobile phones to read information with their built-in cameras and look up infor-mation contained in the code.

Businesses and individual users can create QR codes by visiting free or paid sites that generate the codes. QR codes can then be used on business cards, literature or posters as a source of additional information. You can even create barcodes that you print and put on the front door of your office.

You can probably think of more than one use for a QR code in your business, and it is wise to begin using QR codes as soon as you can. QR codes are not a fad, although the technology could be replaced by some more advanced technology in coming years.

Two examples of QR codes are shown below.

A couple of tools for creating these barcodes include Zint, an open source barcode generator available from SourceForge.net, and QRStuff, a website that has tools to generate QR codes. Users with a camera phone equipped with the correct reader application can scan the image of the QR code to display text and contact information, connect to a wireless network, or open a Web page in the telephone’s browser. This act of linking from physical world objects is ca l led hardlinking or object hyperlinking.

There are more than 50 paid and free QR code apps. Examples of QR code applications include:

➤Google Goggles ➤ Third-party barcode scanners

like ZXing or Kaywa.➤ Bing search app in the Mango

update.➤ Barcode Scanner

I n s i d e

I n s i d e

Fall 2011➜ Profile of a fraudster:

Is one lurking in your company?

➜ Manage conflict to prevent slowdown in productivity

See QR Codes on back

➤ ScanLife➤ QR Name Card ➤ and many more.How could a barcode help your business? One of the

first issues in adopting a new technology is to determine an online solution to an existing business need.

The next step is to create a solution that is easy enough for the average person to use. At this point, only the geeks are using the technology – and then, many times, only because they think the technology is cool. So the trick is to make the technology actually cool and useful in the minds of real people who take kids to school and have full-time jobs.

QR codes solve a significant business need – in this case, getting data keyed into a device such as a smartphone and looking up needed information, such as specification sheets or product information needed for sales. Salespeople are now commonly using QR codes on their business cards, websites, product literature, shipping labels or the product itself to contain much more information than a standard barcode can.

For example, if you wanted a complete bill of lading or certification of a food product in a shipment, a QR code could link back to your document management system to give access to that single document.

What are the steps to using QR codes?Consider the content and locations you’d like to

publish.Select a tool that can create the codes.Build the supporting information for the QR code

request.Include the generated code in your business literature

or information.Use a tracking mechanism to understand which QR

codes are the most effective.Design a follow-up process for opportunities that are

generated.If you have not been using QR codes, consider adopting

the technology. This may be one of the least expensive marketing and tracking tools you have ever found. – Randolph Johnston, CPAmerica’s technology consultant

QR Codes continued from front

QR CodesCost-effective marketing tool

A financial and management bulletin to manufacturers from:

The technical information in this newsletter is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. Please be advised that, based on current IRS rules and standards, the information contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS. © 2011 CPAmerica International

Inventory Counts

SUITE 1700 ASB TOWER

1001 BISHOP ST.

HONOLULU, HAWAII 96813

TELEPHONE (808) 524-2255THE HAWAII AffILIATE Of CPAmERICA INTERNATIONAL